Form 4: Cloudflare President Sells Shares Under 10b5-1 Plan

Cloudflare President Michelle Zatlyn executed pre-planned sales of Class A Common Stock totaling 84,253 shares across three days in February 2026.

Summary

• Michelle Zatlyn, President and Board Co-Chair of Cloudflare, Inc. (NET), engaged in a series of transactions involving the company's stock.
• On February 19, 20, and 23, 2026, Zatlyn exercised employee stock options to acquire 25,641 shares of Class B Common Stock each day, totaling 76,923 shares.
• Immediately following the option exercises, these Class B shares were converted into Class A Common Stock on a one-to-one basis.
• Concurrently, Zatlyn sold a total of 84,253 shares of Class A Common Stock over these three days.
• The sales were executed pursuant to a Rule 10b5-1 trading plan adopted on February 14, 2025, indicating they were pre-scheduled.
• The weighted average sale prices ranged from $172.0657 to $193.7134 per share.
• Following these transactions, Zatlyn's indirect beneficial ownership of Class A Common Stock through the Revocable Trust decreased, while direct ownership of Class A Common Stock is 406,811 shares and indirect ownership through the SZ 2021 Irrevocable Trust is 19,615 shares.
• Remaining derivative holdings include various Class B Common Stock held indirectly through several trusts, convertible to Class A Common Stock.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as neutral. While insider sales can sometimes be a negative signal, the execution under a pre-planned 10b5-1 program mitigates concerns about opportunistic selling, making it a routine personal financial event for the executive.

Positives

• The sales were conducted under a pre-arranged Rule 10b5-1 trading plan, which suggests the transactions are not based on new, non-public information and are part of a long-term personal financial strategy.
• The exercise of employee stock options indicates the realization of value from previously granted equity compensation.

Negatives

• Significant insider selling, even if pre-planned, can sometimes be perceived negatively by investors as it reduces the insider's direct equity stake in the company.
• The total of 84,253 shares sold represents a substantial amount of stock.

Risks

• No explicit company-specific risks are mentioned in this Form 4 filing, as it primarily reports insider transactions.

Future Outlook

This Form 4 filing does not contain any forward-looking statements or guidance regarding Cloudflare's future performance or strategic direction, as it is solely focused on reporting insider transactions.

Industry Context

StockSavvy.ai notes that insider transactions, particularly those executed under a Rule 10b5-1 plan, are common among executives of publicly traded technology companies like Cloudflare. These plans allow insiders to sell shares systematically over time, mitigating concerns about trading on material non-public information. While the volume of sales is notable, the pre-planned nature suggests it is part of a personal financial management strategy rather than a reaction to specific company or industry events.

Comparison to Industry Standards

• Not applicable. This filing reports individual insider transactions, not company performance metrics that can be directly compared to industry benchmarks or competitors.

Related Party Transactions

• Michelle Zatlyn's shares are held indirectly through various trusts, including The Sutherland/Zatlyn Revocable Trust, The SZ 2021 Irrevocable Trust, The SZ 2020 Irrevocable Trust, The SZ 2023 Irrevocable Trust, The Sutherland/Zatlyn 2024 Annuity Trusts, and The Sutherland/Zatlyn 2025 Annuity Trusts, for which she serves in various trustee or advisory capacities.

Stakeholder Impact

• Shareholders: The sale of shares by a high-ranking executive, even if pre-planned, could be interpreted by some shareholders as a reduction in management's direct alignment with shareholder interests, though the 10b5-1 plan context typically lessens this concern.
• Employees: No direct impact on employees is indicated by this filing.
• Customers, Suppliers, Creditors: No direct impact on these stakeholders is indicated by this filing.

Next Steps

• No specific future actions or milestones for the company are mentioned in this filing, as it pertains to past insider transactions.

Key Dates

Recommendation

The filing details pre-planned insider sales by a key executive, Michelle Zatlyn, under a Rule 10b5-1 plan. While significant in volume, these sales are not indicative of new negative information about Cloudflare, but rather a systematic approach to personal financial management. The transactions are expected and do not alter the fundamental investment thesis for the company. Therefore, a 'hold' recommendation is appropriate, advising investors to maintain their current positions based on broader company performance and market conditions rather than reacting to these routine insider sales.

Keywords

Cloudflare, NET, Michelle Zatlyn, Insider Trading, Form 4, Stock Sale, 10b5-1 Plan, Equity Compensation, Class A Common Stock, Class B Common Stock, Option Exercise